Rumors fly about 'bid shopping' for LG Chem battery plant in Holland

Grand Rapids Press File PhotoA new battery manufacturing plant will be built on vacant land off 48th Street, east of Waverly Road, in Holland.GRAND RAPIDS -- Secrecy, confusion and rumor are muddying the process of bidding on the $303 million LG Chem battery plant in Holland.

Bids were due in late March or early April, said John Doherty, of the Associated Builders & Contractors Inc.'s West Michigan chapter.

"Roncelli may not have been that well known to the guys locally," Doherty said. "It could be he didn't get as many bids as out there (in Detroit). Maybe after the fact, they tried to piece something together."

Two of the biggest complaints -- that Roncelli was only tapping union contractors and that it was "bid shopping" after the fact -- are not true, company director John Raimondo said.

"We are not going to only union contractors," he said. "The state of Michigan does have interest groups, both union and nonunion. What we're trying to do is appease and make everybody happy."

TIMELINE

LG Chem construction bids are in. Or are they?

October: LG Chem reports to Asian investors that it will build a battery plant in Holland.March: LG Chem announces site: 859 E. 48th St.April: Roncelli of Sterling Heights wins the general contract for the $303 million plant.May: A Roncelli spokesman says West Michigan subcontractors are being sought; rumors fly that the Detroit-area contractor favors unions and bid shops after the fact.

Bid-shopping is not the contractor's way, either, Raimondo said. In bid shopping, a general contractor asks competing sub-contractors to match the low bid, with the carrot of getting the job instead.

"That's absolutely untrue," Raimondo said when asked about bid-shopping. "That's not our brand, not how we are successful."

The uproar among West Michigan subcontractors taps some deep-seated attitudes, including the sense that Detroit-area contractors are union-centric and get unfair pressure if they hire nonunion contractors on this side of the state.

Mike Powers, co-owner of Allied Electric Inc., said his firm was not the low bidder. But before submitting a bid, Allied checked out Roncelli, he said.

"We thought Roncelli was a pretty stand-up outfit," Powers said. "In checking around, that seems to be the case."

Powers said he did get a call a few weeks ago, asking if he was reworking his bid to make it lower.

"They did not ask me to meet a number," Powers said. "We had given them our best price. I said, 'No.'"

Part of the hassle has been the secrecy surrounding the location and the design of the plant. In October, the Korean-based LG Chem reported to Asian investors that it would build its battery plant in Holland. But the official word didn't come until March.

Not until then did contractors know the 650,000-square-foot plant would be built at 859 E. 48th St. in Holland. LG Chem's Troy subsidiary, Compact Power Inc., will operate it.

"Everything was pretty hush-hush for a long time, so people didn't have the normal amount of time to get ready, to get a chance to look at the plans," Doherty said. "This is a big job for most of those companies."

At Parkway Electrical, 3755 38th St. SE, contractor Gary Zandrstra wasn't asked to lower his bid. Instead, he was trying to get a meeting with Roncelli to discuss it.

"The rumors floating around, had us from middle to high. Nobody said we were low bid," Zandstra said. "It's a great project. We'd love to have it."

As for bid-shopping, it hasn't happened there, Zandstra said.

"We have not been asked to lower our bid number or anything else from them," he said. "We're still trying to get in contact with Roncelli and get a meeting with them."

Construction estimator Jerry Klunder said rumors are rampant about the east-west divide among contractors.